UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15995 / December 8, 1998
Securities and Exchange Commission v. Ronnie R. Neihart and
Synvion Corporation, Defendants. Civil Action File No. 1:98-CV-
3341-WBH (N.D.Ga. December 8, 1998)
The Securities and Exchange Commission ("Commission")
announced today that, after a hearing on the merits, Judge Willis
B. Hunt of the United States District Court for the Northern
District of Georgia entered an order against Ronnie R. Neihart
("Neihart") and Synvion Corporation ("Synvion") preliminarily
enjoining them from further violations of the federal securities
laws. The Commission's complaint which sought a temporary
restraining order and other emergency relief alleged that
defendants Neihart and Synvion engaged in fraud in the offer and
sale of unregistered securities in the form of Synvion common
stock using misrepresentations and omissions of fact to
investors.
The Commission's complaint alleges, and the Court found,
that Neihart and Synvion effected the scheme by falsely
representing that Synvion's stock would be quoted on NASDAQ,
touting false representations that the company's primary assets
of ETA10 supercomputers had a value of $20 million,
misrepresenting the existence of contracts between Synvion and
various corporations when no such contracts existed and
misrepresenting that Synvion had a stock lease agreement with
Prudential. The complaint also asserts, and the Court found,
that the defendants mislead investors as to the status of a 1996
North Carolina cease and desist order and that Neihart used
investor funds for personal items. The Court also found that
Neihart and Synvion sold 11 million shares of Synvion stock to 70
investors in six states since July 1997, and that since 1985
Neihart and Synvion (and its corporate predecessors) sold over 60
million shares of unregistered stock to approximately 1,500
investors in 36 states.
The complaint seeks permanent injunctions against the
defendants to prevent their future violations of Sections 5(a),
5(c) and 17(a) of the Securities Act of 1933 ("Securities Act")
and Sections 10(b) and 13(a) of the Securities Exchange Act of
1934 ("Exchange Act") and Rules 10b-5, 13a-1 and 13a-13
thereunder. The complaint also seeks an accounting, disgorgement
and prejudgment interest from the two defendants, as well as
civil penalties from defendant Neihart.